Help your children get to grips with ‘invisible’ money
Recent research looking at children’s money-managing confidence points out the need to provide pointers as the nature of financial skills change. VICKY SHAW learns more
DO you know how confident the children in your family feel about managing money?
New research from HSBC UK has delved into children’s attitudes towards finances. More than 1,100 children aged between six and 15 were surveyed to find out more about their savings goals and understanding of managing money.
The research found only one in six (15%) kids have never had a savings goal. Nearly half (49%) had saved for a new toy, making this the most popular savings target, followed by 43% who had saved for games.
Looking at how often they receive money, 34% get pocket money every week, while 24% receive it on a monthly basis.
When they do receive money, children were most likely to get between £5 and £7.99.
While the majority receive their pocket money in cash, around a third (34%) receive a bank transfer, the research found. Some 60% of the children surveyed said they had a bank account. Just over a quarter of children said they never get pocket money. The research also found that many may have a steep learning curve ahead of them, when it comes to managing their finances.
Two-thirds (65%) claimed they don’t understand digital and mobile banking well. More than two-thirds (68%) felt they did not understand debt well and, worryingly, 67% were not confident in their knowledge of fraud.
Just over half of children were not confident about budgeting, and 65% were unsure about how to manage a bank account.
The findings coincide with HSBC UK helping to develop a money skills activity badge, to encourage Beaver and Cub Scouts aged six to 10 to build important financial literacy skills.
The activities help children ‘learn by doing’. For example, Cub Scouts may budget for a camp meal and learn about Fair Trade items or locally sourced food. Or they may choose items to pack in their bag for a hike, helping them to learn the difference between what they want and what they need.
In the past, children may have often come into physical contact with money, helping them to understand the value of banknotes and coins. But in an increasingly digital world, where contactless and mobile banking is surging in popularity, money has become more ‘invisible’.
Stuart Haire, head of wealth and personal banking at HSBC UK, says creating new and interesting ways for young people to engage with financial literacy is key.
“Financial literacy is a critical life skill. Having a bank account from an early age helps children to be more aware of money, especially in today’s society, where cash is less visible to children due to the rise in digital payment methods and online banking,” says Stuart.
“Whilst learning how to use online banking is important, it’s crucial that we support children’s understanding of the value of money, and actions such as seeing and receiving physical money can help them. Often money is just a set of figures on a screen or in a maths paper for many young people today. It needs to mean more than this.”
Cash is less visible to children due to the rise in digital payment methods... HSBC’s Stuart Haire